May sales tax revenue report shows decline across multiple sectors

May 2024 sales tax revenue by category. (Estes Park Department of Finance – Courtesy photo)

Continuing a troubling trend into 2024, the May sales tax revenue report shows a further decline in economic activity in Estes Park across multiple categories compared to the same period in 2023.

The report, released July 17 by the City of Estes Park Department of Finance, includes taxes collected in May 2024, remitted to the state of Colorado in June 2024 and received by the City on July 10, 2024.

Of the five reports released in 2024, only the April data showed any overall increase in sales tax revenue compared to the previous month.

In addition to this troubling trend, May 2024 tax revenues were not only lower than in 2023, but also declined 1% compared to sales tax revenues collected in May 2022.

These amounts, which totaled $1,755,388 for May, were down 7.73% from the May 2023 sales tax. Year-to-date General Fund sales taxes are 7.08% lower than in 2023. The General Fund, which receives 80% of these funds, received $1,404,311. The remaining amounts are divided among several restricted funds that support services such as the Emergency Response, Community Center, Streets and Trails Funds.

Only two industry sectors – food and recreation – saw an increase in economic activity year-on-year.

The food sector received $7,556 more, or 4.15%, compared to activity in May 2023. The Department of Finance explained in its report that the food sector saw an increase of $6,937 after delinquent claims were withdrawn, which still appears to indicate increased economic activity.

The recreational sector recorded $39,341 more in taxable sales, or 32% more, than in May 2023.

The largest decline was seen in the hotel sector, which lost $59,787, or 14.34%, compared to 2023 data. This reflects an overall industry decline of $14,834 in 2024 after delinquent claims were withdrawn. Delinquent claims were $44,953 lower in 2024, with several large delinquent refunds filed in May 2023.

Retail receipts for May 2024 showed a slight decrease of 2.7%, or $8,342, compared to May 2023. When adjusted for outstanding refunds of $8,297 in May 2024, the result was similar to the 2023 amount.

Revenues from the restaurant industry sector dropped 6.94%, or $24,725, from a year ago. Delinquent filings dropped $1,279 in 2024 and, according to the Department of Finance report, indicate a decline due to economic activity and possible late filings in May 2024.

The Department of Finance report showed a decline of 10.97%, or $13,207, in the construction sector compared to May 2023. After the withdrawal of delinquent filings, the city received $12,942 less in sales tax revenue this year compared to May 2023 sales tax revenue, which the department said is a sign of reduced economic activity.

Taxable sales reported in May 2024 showed a decrease of 8% compared to May 2023. Year-to-date taxable sales continue to trend down, reflecting a decrease of 7% compared to year-to-date taxable sales in May 2023.

Taxable sales schedules reflect taxable sales activity in the month of actual sale, regardless of when sales taxes were remitted. Taxable sales reported in May 2024 showed an 8% decrease from taxable sales reported in May 2023. Year-to-date taxable sales through May 2024 decreased 7% from year-to-date taxable sales in May 2023.

Changes in the CPI approximate changes in the cost of goods sold. As a result, retailers can adjust their selling prices periodically to cover increased costs, which ultimately affects the amount of sales tax revenue the city receives. The latest information released by the U.S. Bureau of Labor Statistics is for May 2024. Over the past 12 months, the CPI-U for the Denver-Aurora-Lakewood area rose 2.6 percent. The index for all items except food and energy also rose 2.7 percent over the year. Food prices rose 1.9 percent. Energy prices also rose 1.9 percent, partly due to an increase in the price of electricity. More information can be found online at: https://www.bls.gov/regions/mountain-plains/news-release/consumerpriceindex_denver.htm.

For more information, visit the Estes Park Trail-Gazette